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"However, the recovery of funds for the unsecured creditors is entirely dependent on the recovery of November progress claims issued to customers and retentions on previously completed projects and current projects with a combined book value of just over $2m," Oorschot wrote.

On the other side of the ledger, Corbel had assets with a book value of $4.9m, including $1m in November progress claims awaiting approval, $1m in customer retentions in dispute, $1.4m work in progress, its main bank account with $383,000 and a retentions trust bank account with $110,000.

Corbel sought adjudication for money outstanding on a major Auckland project and got an adverse and unexpected ruling, meaning its ability to recover money outstanding on that was called into question, Oorschot's report said.

So liquidation was called for.

Oorschot did not name it specifically but that project is Auckland's 81-unit Parnell Terraces, The Strand leaky building project at Quay Park where Corbel carried out major repairs and where owners' lawyer Jeanne Heatlie of Rainey Law, acting for the body corporate, confirmed financial issues.

Payment claims by Corbel were reviewed and deductions made from subsequent payment claims as a result of earlier over-certifications, Heatlie said. These deductions resulted in adjudication proceedings because Corbel believed the payments were justified, she said.

"That was not the case. The end result was that Corbel owed the body corporate in excess of $500,000," she said.